When it comes to wireless carriers, the move to LTE isn't
the only big thing that's grabbing headlines these days -- a new
report from Bloomberg suggests
that Deutsche Telekom AG is considering selling its T-Mobile USA division to
Sprint Nextel. When it comes to selling the entire business or just portions of
the business, all options are on the table according to Deutsche Telekom.

Discussions are still ongoing as a final valuation on the
deal has yet to be agreed upon.

T-Mobile, the fourth largest carrier in the United States,
is having a hard time staying afloat in an increasingly cutthroat market.
Whereas as wireless competitors like Verizon (largest U.S. carrier) and
AT&T (second largest U.S. carrier) saw an overall net gain in customers
during 2010, T-Mobile actually lost over 50,000 customers during the same
period.

It was leaked today that T-Mobile has plans to launch a new 10GB
webConnect data plan for its smartphone users at a cost of $79.99 per
month. The new service plan will be available starting March 13.

Sprint has also been in the news recently following reports
that it is considering a move
away from WiMAX in order to embrace LTE technology. The adoption of LTE
would bring America's third-largest wireless carrier in line with Verizon and
AT&T, which have already rolled out LTE in select markets.

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I don't believe the "rumor" that Sprint is buying T-Mobile. T-Mobile would not be a good fit for Sprint. T-Mobile and AT&T's networks are based on GSM technology. Verizon and Sprint-Nextel's are based on CDMA technology. It would make no sense for a company to buy another company unless they had the same technology base. If they had the same technology, they could then just add all their towers and users to their own. In the past companies only bought similar technology companys: Sprint buying Nextel and AT&T buying Cingular. It would make more sense for Verizon and Sprint to pair up against AT&T and T-Mobile.

Sprint bought Nextel that was using iDen for their network. And Sprint was using CDMA. If this merger goes through Sprint will be operating iDen, CDMA 2/3, GSM 2/3, WiMax, and LTE. Sprint is supposed to be stopping iDen service around 2013. Sprint is also going to have new radios that support CDMA 2/3, GSM 2/3, WiMax, and LTE. Sprint also has a very large spectrum holding with both them and Clearwire.

quote: I don't believe the "rumor" that Sprint is buying T-Mobile. T-Mobile would not be a good fit for Sprint. T-Mobile and AT&T's networks are based on GSM technology. Verizon and Sprint-Nextel's are based on CDMA technology. It would make no sense for a company to buy another company unless they had the same technology base.

I don't think that's quite true for Sprint. They seem to be taking a more systematic approach to the cell phone business, recognizing that they're in the communications business, not the infrastructure business. In 2008 they sold off a bunch of their towers to raise cash. They then inked a leasing agreement with the new owners to continue providing service. They also have extensive roaming agreements with other carriers (including Verizon - if you have a free roaming plan like I do, you can pay Sprint prices and get Verizon coverage).

Net result is that they're becoming tower- and technology-agnostic, kinda like an airline which leases the planes instead of owning them. Yeah it costs them more in the long run, but it frees up a lot of capital and allows them to quickly change the model planes they fly/tower technology they use in response to changes in customer demand.

Going into the future, GSM(TDMA) vs CDMA isn't really going to be an issue. LTE is sort of the grand unifying standard for cell phone data services. TDMA/CDMA is still used for voice calls, but the technology to piggyback voice services onto data has always been there and will probably see more use as time goes on. As the bulk of cell phone use becomes data, if this deal goes through I can see Sprint signing leasing and roaming agreements with GSM towers to handle GSM voice services, while running data off of other towers.

Wow, really?! You think the primary criteria they look for in acquisition is technological compatibility!? You must be 12.

One word, CUSTOMERS!

Sprint wants more people paying them monthly fees with a potential renewal at contract expiration. Obviously the revenue generated from the aforementioned fees is significant enough that it covers the costs of running and maintaining a cellular network and then some. Otherwise they wouldn't be in business in the first place.